Wiz’s decision to turn down a major offer from Google could have significant repercussions for the tech landscape, particularly for Microsoft.
The tech giant aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but on Tuesday, Wiz’s CEO Assaf Rappaport announced the company’s rejection of the proposal. Rappaport stated that the difficult decision was made to focus on growing Wiz towards generating $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity operations at a time when the sector was recently disrupted by a large-scale outage related to CrowdStrike, another major player in the industry. Analyst Dan Ives from Wedbush expressed in a research note that concerns from investors and antitrust challenges contributed to the collapse of the deal. Google has faced considerable antitrust scrutiny in recent years and has just concluded its trial in one of two significant cases brought by the Department of Justice.
Ives noted in an email to investors that the failure of this deal is likely to create ripples throughout the industry. He anticipates that Google will continue to focus on expanding its cybersecurity capabilities despite the setback from the Wiz deal, a move that may also encourage its competitor Microsoft to enhance its cybersecurity platform.
He highlighted that consolidation is overdue in the cybersecurity space and projected that Microsoft might pursue similar strategies to strengthen its offerings within the next year to 18 months.
Microsoft recently faced criticism due to a global IT outage caused by a problematic update to its cybersecurity software from CrowdStrike. This incident disrupted numerous businesses, flights, and government operations worldwide, as many reported encountering the notorious “blue screen of death.” While Ives maintains that CrowdStrike remains a leading figure in cybersecurity, this incident signals that Microsoft should consider bolstering its cybersecurity measures further, and Google’s abandoned acquisition merely opens more opportunities for this development.